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Enzon Reports 1st Quarter 2011 Results

(2) Adjusted financial results exclude restructuring charges associated with: on-going lease commitments for vacated corporate offices and severance associated with termination of employees involved with the Company’s specialty pharmaceutical business and certain general and administrative functions including the resignation of the former CEO.

(3) The diluted earnings per share computations involve inclusion of dilutive shares in the denominator and other adjustments to reflect an assumed conversion of notes payable. Such factors are not included in the computation of diluted loss per share. A per-share computation of the individual reconciling items in this display is not meaningful as a result of the two different bases of computation of the other elements.

(4) Adjusted loss and adjusted loss per diluted share from continuing operations, as the Company defines them, may differ from similarly named measures used by other entities and consequently, could be misleading unless all entities calculated and defined such items in the same manner. The Company believes that investors’ understanding of its performance is enhanced by disclosing adjusted net loss and adjusted net loss per diluted share reflecting adjustments for certain items that the Company deems to affect comparability between periods.

About Enzon

Enzon Pharmaceuticals, Inc. is a biotechnology company dedicated to the research and development of innovative therapeutics for cancer patients with high unmet medical needs. Enzon’s drug-development programs utilize two platforms - Customized PEGylation Linker Technology (Customized Linker Technology ®) and third-generation mRNA-targeting agents utilizing the Locked Nucleic Acid (LNA) technology. Enzon currently has four compounds in human clinical development and multiple novel LNA targets in preclinical research. Enzon receives royalty revenues from licensing arrangements with other companies related to sales of products developed using its proprietary Customized Linker Technology. Further information about Enzon and this press release can be found on the Company’s website at www.enzon.com.

Forward Looking Statements

There are forward-looking statements contained herein, which can be identified by the use of forward-looking terminology such as the words "believes," "expects," "may," "will," "should,” "potential," "anticipates," "plans," or "intends" and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from the future results, events or developments indicated in such forward-looking statements. Such factors include but are not limited to the timing, success and cost of clinical studies for Enzon’s product candidates, the ability to obtain regulatory approval of Enzon’s product candidates, Enzon’s ability to obtain the funding necessary to develop its product candidates, market acceptance of and demand for Enzon’s product candidates, and the impact of competitive products, pricing and technology. A more detailed discussion of these and other factors that could affect results is contained in Enzon's filings with the U.S. Securities and Exchange Commission, including Enzon's most recent Annual Report on Form 10-K for the year ended December 31, 2010 . These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. No assurance can be given that the future results covered by the forward-looking statements will be achieved. All information in this press release is as of the date of this press release and Enzon does not intend to update this information.

Enzon Pharmaceuticals, Inc. and Subsidiaries

Consolidated Statements of Operations

Three Months ended March 31, 2011 and 2010

(In thousands, except per-share amounts)

(Unaudited)

 
  Three months ended
March 31,
 
2011   2010  
 
Revenues:
Royalties $ 11,762 $ 12,901
Sale of in-process research and development 5,000 40,900
Contract research and development 1,094 2,609
Miscellaneous income 166   1,843  
Total revenues 18,022   58,253  
 
Operating expenses:
Research and development – pipeline 10,548 11,515
Research and development – specialty and contracted services 647 3,059
General and administrative 5,086 9,932
General and administrative – contracted services 58 1,400
Restructuring charge 359   9,889  
Total operating expenses 16,698   35,795  
 
Operating income 1,324   22,458  
 
Other income (expense):
Investment income, net 459 971
Interest expense (1,480 ) (2,676 )
Other, net 128   1  
Total other income (expense) (893 ) (1,704 )
 
Income from continuing operations before income tax provision 431 20,754
 
Income tax provision -   -  
 
Income from continuing operations 431 20,754
 
Income and gain from discontinued operations, net of income tax -   179, 053  
Net income $ 431   $ 199,807  
 
Earnings per common share - continuing operations
Basic $ 0.01   $ 0.40  
Diluted $ 0.01   $ 0.29  
Earnings per common share – discontinued operations
Basic $ -   $ 3.42  
Diluted $ -   $ 2.41  
Earnings per common share – net income
Basic $ 0.01   $ 3.82  
Diluted $ 0.01   $ 2.70  
 
Weighted-average shares - basic 58,002   52,284  
Weighted-average shares - diluted 58,736   74,242  

Enzon Pharmaceuticals, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

March 31, 2011 and December 31, 2010(In thousands)

(Unaudited)

 
  March 31,

2011

 

December 31,2010

 
Assets
Current assets:
Cash and short-term investments $ 405,522 $ 428,700
Other current assets 4,589 5,916
Total current assets 410,111 434,616
Property and equipment, net 20,223 21,574
Other assets:
Marketable securities 13,334 31,394
Other assets 1,175 1,273
Total other assets 14,509 32,667
Total assets $ 444,843 $ 488,857
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses $ 14,529 $ 18,387
Total current liabilities 14,529 18,387
 
Notes payable 134,499 134,499
Other liabilities 4,355 4,114
Total liabilities 153,383 157,000
 
Stockholders’ equity 291,460 331,857
Total liabilities and stockholders’ equity $ 444,843 $ 488,857
 
Common shares outstanding 55,053 58,818




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